Improving inventory and distribution in an aerospace parts and service organization

Abstract

Hamilton Sundstrand has made several changes to their supply chain in recent years, including increased offshore and outsourced production, new service offerings and relocation of facilities, to meet shifting business needs to remain a top competitor in the aerospace systems industry. This thesis reviews the distribution network of their aftermarket parts and service business to ensure that Hamilton Sundstrand meets customer needs through efficient supply chain design and aligning business strategy with inventory planning. A review of the current state is employed to locate gaps in strategic design, operating efficiencies and customer service levels. Improvement opportunities identified in the current state analysis are addressed with proposed alternatives to adjust the distribution network to meet current and future needs while minimizing cost and maintaining or raising service levels. The combined proposals of relocating distribution center volumes, reducing on hand inventory at co-located sites and closing a forward stocking location are estimated to result in over one million dollars in annual cost savings.